A Bridge on Economic Issues between China and the World
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Haoyuan Ding, Haichao Fan, Shu Lin, Feb 21, 2018A key foundation of Chinese-style institutions is that different levels of government control resources and utilize their power to support businesses connected to them. Professors Haoyuan Ding of Shanghai University of Finance and Economics, Haichao Fan of Fudan University, and Shu Lin of the Chinese University of Hong Kong develop a theoretical model and present supporting empirical evidence to show how this institutional feature affects firm exports in China. In particular, they find that political connection has a positive effect on export in industries that heavily rely on external finance and contracting environment, but a negative effect on export in other industries.
The Hidden Cost of Trade Liberalization: Input Tariff Shocks and Worker Health in China
Haichao Fan, Faqin Lin, Shu Lin, Jun 24, 2020Can intermediate input trade liberalization affect worker health in a developing country like China, and if so, how? Do the impacts differ between skilled and unskilled workers? What are the welfare implications of input tariff reductions once health factors are considered? Professors Haichao Fan of Fudan University, Faqin Lin of China Agricultural University, and Shu Lin of the Chinese University of Hong Kong develop...
The Reference Effect of Government Bonds on Corporate Borrowing Costs
Mark J. Flannery, Claire Yurong Hong, Baolian Wang, May 29, 2019It has been widely argued that government bonds can be used as a reference point for pricing corporate bonds. This “reference” role can reduce the cost of corporate borrowing. The authors study this question by examining a unique experiment in China. China issued two sovereign bonds denominated in U.S. dollars (USD) in October 2017, the first...
Resolving Zombie Firms is Key for Sustaining Growth in China
Yiping Huang, Yuyan Tan, Jun 28, 2017China's non-financial borrowing continued to expand though the government vowed to take deleveraging among its top five policy priorities in 2016. Current member of the People's Bank of China's Monetary Policy Committee, Prof. Yiping Huang of Peking University, and his co-author Yuyan Tan of Peking University argue that resolving Zombie firms is a key for China’s deleveraging. The rising share of Zombies firms in China after 2010 reduces the financial efficiency and brings in financial market risks. Dealing with the Zombie firms is now critical for sustaining China’s long-run economic growth and managing its financial stability.
Are the Most Aggressive Investors in China Actually Informed?
Christian T. Lundblad, Zhishu Yang, Qi Zhang, Aug 30, 2017Using a unique Chinese data set capturing the trading behavior of particularly aggressive investors, we provide new evidence that is consistent with the presence of informational advantages. Critically, an advantage of our data is that we can also directly identify several plausible channels through which such an informational advantage could arise. Specifically, return predictability around key value-relevant events is most pronounced in the presence of aggressive traders who share the same geographic location as the firms in which they trade.
